diff --git a/test/functional/test_framework/txtools.py b/test/functional/test_framework/txtools.py
index 3fe33a435e..1ac649a810 100644
--- a/test/functional/test_framework/txtools.py
+++ b/test/functional/test_framework/txtools.py
@@ -1,40 +1,71 @@
 from .cdefs import MIN_TX_SIZE, MAX_TXOUT_PUBKEY_SCRIPT
 from .mininode import CTransaction, FromHex, ToHex, CTxOut
 from .script import OP_RETURN, CScript
 
 import random
 from binascii import hexlify, unhexlify
 
-# Pad outputs until it reaches at least min_size
-
-
-def pad_tx(tx, min_size=None):
-    if min_size is None:
-        min_size = MIN_TX_SIZE
 
+def pad_tx(tx, pad_to_size=MIN_TX_SIZE):
+    """
+    Pad a transaction with op_return junk data until it is at least pad_to_size, or 
+    leave it alone if it's already bigger than that.
+    """
     curr_size = len(tx.serialize())
+    if curr_size >= pad_to_size:
+        # Bail early txn is already big enough
+        return
+
+    # This code attempts to pad a transaction with opreturn vouts such that
+    # it will be exactly pad_to_size.  In order to do this we have to create
+    # vouts of size x (maximum OP_RETURN size - vout overhead), plus the final
+    # one subsumes any runoff which would be less than vout overhead.
+    #
+    # There are two cases where this is not possible:
+    # 1. The transaction size is between pad_to_size and pad_to_size - extrabytes
+    # 2. The transaction is already greater than pad_to_size
+    #
+    # Visually:
+    # | .. x  .. | .. x .. | .. x .. | .. x + desired_size % x |
+    #    VOUT_1     VOUT_2    VOUT_3    VOUT_4
+    # txout.value + txout.pk_script bytes + op_return
+    extra_bytes = 8 + 1 + 1
+    required_padding = pad_to_size - curr_size
+    while required_padding > 0:
+        # We need at least extra_bytes left over each time, or we can't
+        # subsume the final (and possibly undersized) iteration of the loop
+        padding_len = min(required_padding,
+                          MAX_TXOUT_PUBKEY_SCRIPT - extra_bytes)
+        assert padding_len >= 0, "Can't pad less than 0 bytes, trying {}".format(
+            padding_len)
+        # We will end up with less than 1 UTXO of bytes after this, add
+        # them to this txn
+        next_iteration_padding = required_padding - padding_len - extra_bytes
+        if next_iteration_padding > 0 and next_iteration_padding < extra_bytes:
+            padding_len += next_iteration_padding
 
-    while curr_size < min_size:
-        # txout.value + txout.pk_script bytes + op_return
-        extra_bytes = 8 + 1 + 1
-        padding_len = max(0, min_size - curr_size - extra_bytes)
-        padding_len = min(padding_len, MAX_TXOUT_PUBKEY_SCRIPT)
-        if padding_len == 0:
+        # If we're at exactly, or below, extra_bytes we don't want a 1 extra byte padding
+        if padding_len <= extra_bytes:
             tx.vout.append(CTxOut(0, CScript([OP_RETURN])))
         else:
+            # Subtract the overhead for the TxOut
+            padding_len -= extra_bytes
             padding = random.randrange(
                 1 << 8 * padding_len - 2, 1 << 8 * padding_len - 1)
             tx.vout.append(
                 CTxOut(0, CScript([padding, OP_RETURN])))
-        curr_size = len(tx.serialize())
 
+        curr_size = len(tx.serialize())
+        required_padding = pad_to_size - curr_size
+    assert curr_size >= pad_to_size, "{} !>= {}".format(curr_size, pad_to_size)
     tx.rehash()
 
-# Pad outputs until it reaches at least min_size
-
 
-def pad_raw_tx(rawtx_hex, min_size=None):
+def pad_raw_tx(rawtx_hex, min_size=MIN_TX_SIZE):
+    """
+    Pad a raw transaction with OP_RETURN data until it reaches at least min_size
+    """
     tx = CTransaction()
     FromHex(tx, rawtx_hex)
     pad_tx(tx, min_size)
     return ToHex(tx)